True impacts of Obama-care are starting to surface

Published: Friday, April 12, 2013 at 07:09 PM.

Fine, that’s your prerogative but prepare to buck up or find the nearest exist. At Mohawk Industries, employees are fined $100 for each month they refuse to participate in a health-risk assessment.

What did people expect businesses to do when Washington rammed a costly mandate down their throats? Eat the costs themselves? Of course they are not. Soon, the vast majority of working Americans are going to find out first hand just how costly socialized medicine really is.

Swansboro resident Mike McHugh is an advertising account executive with The Daily News. Readers can email him at: mike.mchugh@jdnews.com.

My first three jobs were with privately owned commercial printing companies, each of which employed more than 125 people and generated upward of $40 million in annual sales. The first two were in Tuxedo and Rockville, Md., respectively; and the third was for a Charlotte, N.C. -based plant.

My fourth job — and the one I’ve enjoyed the most — has been with The Daily News.

What I’ve learned in 30 years from seeing these businesses from the inside is that while corporations initially take on expenses — such as material and employee costs as well as expenses from government-imposed regulations or mandates — many are quick to pass them along to their customers in the form of higher prices for the goods and services they provide. I saw this more with the printing companies than I have with the newspaper.

In the case of the printing companies, our largest expense after personnel was the cost of paper. A typical printing job might have 40 percent of its cost allocated to paper. When paper mills tried to initiate a paper-price increase — which occurred frequently in the go-go years of direct mail and catalog printing in the ‘80s and ‘90s — to merchants from whom we purchased our stock, they merely passed along the increase to us. My company would, in turn, charge its client more for the printed product. The end user — with no one left in the chain to pass along the added cost — was stuck paying more than before.

Think of how the airlines have used the increasing fuel prices and added cost of security after 9/11 to their advantage. They came up with a menu of fees on services that had been free for as long as commercial aviation had been in existence. Now they impose fees to buy a ticket, obtain boarding passes, select seats and some even have a fee for a bag of peanuts.

We’re soon to reach a point in time where the next generation of air travelers will have lived their entire lives where luggage — whether checked at the gate or carried onboard — has always carried a fee of $25 per bag. Readers who are as old as me recall the golden age of travel where bags flew free, the Champaign flowed in the front cabin and smokers created a blue haze after wheels up.

Even if fuel prices were to drop below $2 a gallon and security reached the level sustained by Israel’s national carrier, EL-AL Airlines, does anyone believe the airlines would give up these new and lucrative revenue streams? Of course they wouldn’t.

Once a fee, in the case of the private sector, or a government-imposed tax is established the likelihood of it disappearing is remote.

So buckle up, folks, because a new expense is about to hit your pocketbook thanks to the Patient Protection and Affordable Care Act more commonly known as Obama-care — the Democrats 2,300-page plan to provide affordable health insurance for all US citizens and to reduce the growth in health care spending.

Among many other things, the PPACA mandates employers to provide health care to their employees or be penalized if they choose not to. An April 6, Wall Street Journal article cited a study by Towers Watson, a global consulting company, that projected health care costs to “reach an average of $12,136 per employee this year.”

Companies have three options in addressing this cost: They could do nothing; they could attempt to pass along the expense to their clients; or they could pass it to the employees by upping their part of the insurance costs.

Companies such as General Electric, Honeywell, CVS, Mohawk Industries and Michelin, to name a few, are requiring their employees to subject themselves to health screenings — basically having a complete physical performed on their bodies — then sharing the results with their company’s human resource department who then passes this very private information to the firm’s insurance company who decides what amount of insurance each employee must pay.

The story cites tire manufacturer Michelin, who imposes up to $1,000 additional health care costs to employees with high blood pressure or large waistlines. So you say, “I would never submit to such an invasive health care protocol.”

Fine, that’s your prerogative but prepare to buck up or find the nearest exist. At Mohawk Industries, employees are fined $100 for each month they refuse to participate in a health-risk assessment.

What did people expect businesses to do when Washington rammed a costly mandate down their throats? Eat the costs themselves? Of course they are not. Soon, the vast majority of working Americans are going to find out first hand just how costly socialized medicine really is.

Swansboro resident Mike McHugh is an advertising account executive with The Daily News. Readers can email him at: mike.mchugh@jdnews.com.